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How Hyprop’s dividend growth tumbled

The results stand out amid hard operating conditions for the listed property sector

03 September 2018 - 05:03
Alistair Anderson

Comfort: Hyprop CEO Pieter Prinsloo said results were still ahead of their peers. Picture: Business Day

Shopping malls owner Hyprop Investments expects 5%-7% dividend growth for the 2019 financial year, but CEO Pieter Prinsloo said even though this may be disappointing, it was still well ahead of its peers.

Hyprop, which owns nine premium SA shopping centres including The Mall of Rosebank, Clearwater Mall, Hyde Park Corner and Canal Walk, declared a total dividend per share of 756.5c for the year to June, up 8.8%.

"Our investors may have become used to us growing our dividends in the double digits and this forecast is very conservative and could be disappointing, but it’s still ahead of market averages," Prinsloo said.

A number of real estate investment trusts are forecasting dividend growth of 1%-4%, with some warning their income payouts will not grow at all, or they will shrink.

Hyprop also has exposure to African and southeast European shopping centres.

Earnings increase substantially

The company said "against the backdrop of a pressured consumer environment", distributable earnings increased substantially, by 10.5%, on strong organic growth, successful acquisitions in southeast Europe and the improvement of assets in SA in the second six months of the year.

In the second half of the year distributable earnings increased 6% following the occupation of stores vacated by the defunct retail group Stuttafords, and completed upgrade and extension work at The Glen and The Mall of Rosebank.

"Certain malls continued to record good trading density, especially CapeGate and Clearwater Mall, but trading density growth for the portfolio reduced to 0.5% for the year from 1.4% as declining consumer spend began to come through," Prinsloo said.

Hyprop has shelved the separate listing of its East European assets, which it holds in a joint venture known as Hystead, with the company PDI.